Research for agri committee - The EU cattle sector: challenges and opportunities - milk and meat

The EU cattle sector consists of the EU bovine meat sub-sector, which produces and processes beef and veal, and the EU dairy sector which produces and processes cow milk. The cattle sector is of considerable importance to the European Union (EU): the EU is one of the world’s leading producers, consumers, and traders of bovine meat and dairy products; the sector provides employment and contributes to territorial vitality especially in marginal or vulnerable regions; it provides environmental goods such as biodiversity preservation; and many EU beef meat and dairy products are regarded as high quality products that are protected by EU schemes. Nevertheless, the EU cattle sector is faced with severe challenges in recent years. These challenges relate to: public policies – both at national and EU level – such as environmental restrictions and the abolition of the milk quota system in April 2015; price developments at world, EU and national levels; problems of profitability in the sector; changing demand both in terms of quantity and quality; increased competition in the EU due to the progressive opening of the market through international trade agreements; a changing geopolitical context; the international economic situation; and the consequences of climate change.

The Common Agricultural Policy (CAP) includes provisions for the support of the EU cattle sector such as direct payments and market measures under the first pillar and rural development measures under the second pillar. However, challenges in the sector are of such a nature that specific support measures – especially for the dairy sector – were introduced. These included the 2012 milk package to improve bargaining of dairy farmers in the milk supply chain and the 2015 aid package targeting the beef meat and dairy sectors through, among others, aid for private storage and promotion.

In light of these considerations, the aims of the study are to:

1) Analyse the current situation of the EU cattle sector focusing on its characteristics, the interlinkages between the meat and dairy sectors, the challenges and opportunities it is facing and the reasons behind the current crises.
2) Propose specific policy options for CAP measures for supporting the EU cattle sector by focusing on an assessment of the role of current CAP measures for farmers’ incomes and by discussing potential alternative measures of support for the sector.